Some North Carolina residents might wonder whether they need a trust as part of their estate plan. Although there are many different kinds of trusts, one that is helpful for many people is a revocable living trust. This means that it is created while a person is alive and can be changed during their lifetime.
A trust has a trustee, beneficiaries and assets. The trustee is the person who is in charge of administering the trust. The assets go to the beneficiaries. Creating a trust does not automatically mean that it has assets, so placing assets in the trust is an important step.
The person who creates the trust, referred to as the settlor, will normally specify how the assets that fund it are distributed. For example, if the beneficiaries are the settlor's children, the assets might be held for them while they are minors. Once the children are adults, assets might be distributed to them as they reach certain milestones, such as particular ages. A trust can also treat beneficiaries differently. For example, if one beneficiary tends to be irresponsible, there might be tighter controls on the distribution of money to them. A trust might also protect assets from creditors or even spouses of beneficiaries.
An attorney might be able to explain the advantages of different types of trusts. For example, trusts can be created to take care of relatives with special needs or for charitable reasons. Trusts have other advantages as well such as greater privacy and quicker distribution of assets since they do not have to go through probate.